Luohong is not a sentimental thing, turned into spring mud to protect flowers.

Current weekly review (early June 1)

Introduction: a simple playback of the steel market in May.

The main factors of the long-short game logic in May include, but are not limited to, the impact of Sino-US trade negotiations, better-than-expected macroeconomic indicators and a renewed fall in PMl in May below the line of prosperity and decline. Coke and iron ore prices are popular on the pseudo-proposition of strong support for steel prices, RB production continues to be high, high demand and demand moderate convergence, environmental production limit pseudo logic and high profit to drive supply-side expansion on the road. According to the prospective study, the front high and the back low, the resistance decreased, the spatial dimension 300 + 30 (local area crossing, local area landing, a few areas not reached) basically arrived on schedule; The futures RB1910 contract is mainly disturbed by the superimposed capital driven by the base difference, and it is inevitable to look back on the iron ore price between 3950 and 3650. Coke normal second round price rise fell to the ground, the fourth round price rise fetal stillborn, rush high fall; coke coal food tasteless also arrived as expected. May has become a memory, June steel market how to deduce, see the following verification!

This week's current market is simple to play back.

1. This week's multi-space game elements include, but are not limited to,

(1) inventory is still on the way.

(2) the rising price of iron ore and coke strongly supports the price of steel.

(3) the high demand is absent, and the demand converges gently.

(4) there is no doubt about the temperature and expansion on the supply side.

(5) the rising price of coke and iron ore to support the price of RB steel is a false proposition.

(6) the inventory inflection point is only late but will not be absent.

(7) PMl fell back again in May to 49.4 per cent.

two。 Spot: the overall price of the steel market fell this week, an average of about 100; RB fell slightly more than HC. The price of steel billet in Tangshan area has dropped by 30 yuan, with a weekly income of 3560 yuan per ton (3590 yuan per ton last week). Market mentality: cautious, wait-and-see, pessimistic gradually escalate.

3. Futures: the author forecasts the landing of capricious disturbance of funds.

RB1910 contract:

The funds are arrogant 3926, the crane crowned monkey 3744.

It fell sharply between 3926 and 3744 in the week, closing 3750 a week (3889 last week).

HC1910 contract:

Dare not fierce tiger, dare not Feng he!

It fell sharply between 3759 and 3617 in the week, closing 3625 a week (3726 last week).

Iron ore l1909 contract:

Huo went sick and galloped 774.5.

He died early in his prime.

It fell back between 774.5 and 727 in the week, closing 727 per week (732 last week).

Demon Jiao J1909 contract:

Things flourish and decline, happiness is sad;

Ups and downs are unlimited, the average disaster!

During the week, it plummeted between 2362 and 2138.5, with a weekly income of 2140.5 (2321 last week).

Coking coal JM1909 contract:

A woman with small feet is a slender step.

It fluctuated weakly between 1427 and 1376.5 during the week, closing 1386 per week (1418 last week).

In short, the author predicted landing: high hanging mirror to judge supply and demand, steel honor and disgrace will not be regenerated!

Next week's current forecast.

1. Spot: step into the bottom stage.

two。 Futures:

RB1910 contract: between 3680 and 3810.

HC1910 contract: between 3580 and 3730.

Iron ore L1909 contract: between 710 and 750.

Demon Jiao J1909 contract: between 2110 and 2300 concussion.

Coking coal JM1909 contract: between 1360 and 1430.

< 3 > suggestions for current operation.

1. Spot: the difference of regional decline determines the difference of operation. At the dividing line of 300 + 30.

Those who do not reach the area: continue to reduce inventory, inventory pressure-free smooth rolling operation is appropriate.

Those who fall into the area: it is appropriate to gradually intervene in and out of the rolling operation to replenish the inventory.

Those who cross the area: turn on the replenishment operation. Suddenly worry about gain and loss!

two。 Futures:

The end of timber: in the interval, the empty orders gradually meet the trend of closing positions and leaving the market. (pay attention to the most sad position of RB1910 contract 3560, you can get involved in heavy positions).

The short RB1910 contract multi-HC1910 arbitrage warehouse receipt continues to be held, and the base difference of the target contract returns to zero.

Iron ore i1909 contract: the author only holds a short-term look back, the trend is still on the way. Short-term empty single every time along the value of the stop off the field, the trend is once again single gradually low intervention (effective break through 675 stop loss).

Coke: in the interval, the low altitude single gradually stops the surplus and leaves the field, and the trend is more single and low and gradually intervene (stop loss 2080).

Coking coal: wait and see or near the value of light warehouse empty (romantic capital efficiency).

< April > the operation of the steel market in June is prospected (refined).

1. A brief analysis of the policy of environmental protection and production restriction.

The author believes that the policy of environmental protection and production restriction should take into account environmental protection and stable economy, and the supply-side reform of the iron and steel industry should not only ensure success (long process steel enterprises are not losing is the bottom line) but also not hurt other manufacturing industries (high-voltage lines, excessive flying).

As a result, despite the easing of production restrictions in Tangshan this weekend, there is a good chance that the economy will start smoothly. However, the author judges that unsustainability is a high probability. The logic is as follows: first, it is not intended to help the high demand for iron ore, is the war of the country. Second, it is subject to the national policy of "green mountains and green waters". Third, the success or failure of supply-side reform in the iron and steel industry is related to the major issues of right and wrong, and there is no room for excessive willfulness of the power of the local government.

In short, the degree is the highest wisdom, short do not excessive delusion!

two。 How much do you know from the time and space dimension of steel price decline from the capacity, cost and profit of electric arc furnace?

In the cycle of trend decline, the author once said: the decline of steel price needs to pass through the gross profit of arc furnace steel and superimposed inertia decline in order to reverse the capacity contraction of electric arc furnace.

At present, the average profit of electric arc furnace is still 100 yuan / ton, and the downward space is at least 100 yuan / ton. Common sense is not justified! From the point of view of long process cost, the high demand of iron ore fundamentals continues to maintain or even further expand, and it is not alarmist to set a new high after looking back on the price, and the cost is close to the cost of electric arc furnace. Let it go, iron ore and scrap hole movement power is greatly enhanced, thus promoting scrap prices to look back after continuing to move forward is a high probability event. Therefore, spot prices fall, scrap prices rise two-way compression RB "second mother" electric arc furnace profits and forced its capacity to shrink, thus greatly shortening the dimension of time and space.

In short, this round of trend decline from the empty dimension are not far, limited! The author expects that the stoppage of the excessive decline in the first and middle of June is a high probability event.

3. Demand side.

Despite the absence of high demand, demand remains resilient. It is not difficult to prove the resilience of demand: there is no doubt that infrastructure is on the road; demand for real estate is enough to look at the 13.1 per cent growth rate of new construction in April.

4. On the raw material side.

The original judgment on iron ore is maintained:

From a fundamental point of view, high demand, high discount superimposed supply-side convergence is still maintained, the only uncertainty is the policy disturbance. The author analyzes that the effective intervention tools of policy are limited, and the most direct and effective way is to open the hammer of environmental protection to limit production, but it is also limited by the current situation of macroeconomic operation.

Coke:

From the basic point of view, coke enterprise inventory is not under pressure, the reason why the author predicted the fourth round of price rise is dead, mainly based on the steel price profit contraction superimposed "bully soft (coke) afraid of hard (iron ore)" judgment! Prediction: the fourth round of price increases are likely to fall to the ground from late June to July.

5. Inventory inflection point knowledge.

This week HC inventory inflection point arrived as scheduled, RB inflection point is still holding the pipa half covered with shy face. The arrival of the inflection point is not the only footnote for another sharp fall. First, the market price has been expected in advance, the second is to see the total inventory and equivalent price, the value ratio of the same period this year (price / inventory total / cost value) is far lower than the same period last year.

6.RB cost strong support is a false proposition has been gradually verified; there are only and only high and long process products, strong cost support is still effective. Don't confuse the public!

7. Steel RB1910 contract, if the gap is unfortunately out of reach, happy to see its success; the author tends to, gap compensation is a small probability event! Take it easy on the bears.

8. In early June, "Heaven wailed qu Yuan and the examination of life" caused a strong convergence of short-term demand, do not use chicken feathers as a sharp arrow! It's not the essence.

In short, a summary of the analysis, and give the author's point of view: before June low after high, the decline stopped in the first ten days to the middle of the transition period, late start the rebound journey is a high probability event!

Details consultant Lu Qingping 021 51595781

(statement: this article is made and published exclusively by SMM Steel under the exclusive license of the author, and may not be reproduced without authorization)